Prediction Market Platforms Call on SCOTUS to Take a Stance

Crypto.com and Robinhood Markets have had enough with the constant equivocation surrounding the legality of prediction markets insofar as state gaming regulators are concerned. 

Crypto.com and Robinhood Markets Call on SCOTUS to Make a Stand

The companies want the Supreme Court of the United States to finally intervene and determine whether gaming regulators can intervene in the case of event contracts, equating them to a form of gambling, which Crypto.com and Robinhood insist is wrong.

Instead, the two platforms want the Supreme Court to finally establishing that the Commodity Exchange Act outright prohibits action from gaming regulators against regulators. The platforms insist that federal preemption should dictate how event contracts are viewed in the country, and should once and for all deal away with challenges from gaming regulators. 

“The Commodity Exchange Act (CEA) regulates the trading of commodity futures in the United States. Passed in 1936, it has been amended several times since then. The CEA establishes the statutory framework under which the CFTC operates. Under this Act, the CFTC has authority to establish regulations that are published in title 17 of the Code of Federal Regulations,” the CFTC states in its rules. 

But despite Crypto.com and Robinhood gripes, SCOUT is no closer to weighing in on the matter, with the Supreme Judges keeping mum on the issue. New Jersey has also sought input from the highest court  in a bid to clarify matters.

The core argument is well-established. Gaming regulators loathe the idea that prediction markets, which have extensively used betting language to promote their offer, argue that they are not “gambling platforms” and that event contracts are not a form of sports betting.

Gaming Regulators and Prediction Markets Caught in the Familiar Pickle

Gaming regulators have maintained that sporting event contracts are indeed just that, and that without a license, they fall under the purview of gaming regulators. 

On the flip side, Kalshi and Polymarket have repeatedly and firmly rebuked the notion, responding that they provide event contracts which are, as pointed out earlier, regulated under the CEA.

These opposing arguments have led to a legal deadlock that has been fought state-by-state and has led to different outcomes, with Nevada scoring a major win, forcing Kalshi to shutter its offer locally, but other states failing to – or lacking the resources to – force prediction markets to comply with gambling laws.